>> SCHMIDT: Good afternoon. What you have seen there is a history, a short history but
a very fast history of Android. And who would have thought a few years ago that we would
end up with more than 300,000 Android activations per day, and that number is growing very fast,
and more than 170 compatible Android devices, 27 OEMs, 169 carriers, and 69 countries. And
now, it's interesting, we have more than 150,000 applications on our Android app store, that
number has tripled in nine months. So this is, I believe, now the fastest growing mobile
platform in the world. Of course, it's appropriate that we'd be here at the most important mobile
congress in the world as well. This is not about a phone. It's not about a platform.
It's about an ecosystem and everybody here in the room working together. And what I want
to do is I want to put what we're doing and why we're doing it into a kind of perspective
that can help you understand what we're doing and maybe get your help in building it out
because we're going to need everybody to help us make this thing what it can really be in.
I particularly like coming to Europe because the European government always thinks ahead.
Broadband targets, right, European Union broadband targets. Basic broadband for every unite--European
Union citizen by 2013, 100%; good. Fast broadband defined as 30 megabits per second, they want
50%--I'm sorry--100% of EU citizens to have that by 2020, and they want 50% of the European
households to have subscriptions above 100 megabits per second in 2020. Now this is a
group I can work with because this is a group that really understands the power of broadband,
the power of connectivity, and the importance that this has in everything we do; our daily
lives, the way we literally live, work, play, entertain ourselves, the structure of our
markets and so forth and so on. Now, I've been thinking a lot about this because we've
seen so much progress, right, so much progress in the last decade, and it's interesting that
it's happening so fast, people don't appreciate how profound these changes are. And everything's
changing again. I'm sorry to say if you just feel like you're a little bit being jerked
around by it all. And I--I've actually come to a new view. I actually think it's going
to get to the point where technology is going to serve humans and not the other way around
to which of what it seems to be today, we seem to be spending all of our time serving
technology. And it's interesting that Joe Scarborough just wrote an article. He's an
American columnist who's very sort of well-followed. He talks of a world where computers offer
a cold substitute to human contact. And he says, "Technology is winning the battle against
actual human contact," and I think that this kind of criticism is exactly wrong, that in
fact what we're building is in fact the opposite of what people are criticizing us for, that
in fact the goal of everything we're doing is so that I can spend more time with the
people that I care about, friends, family and so forth and so on, that I can spend more
time exploring new places, that I can have a more fulfilled life as I define it and that
I can make the world a better place, and for every version of "I" I just said say yourself,
or say your friends, or say all of the human citizens. And I would offer sort of a happiness
theorem that computers are really here to make us happier and that the quicker we can
get to doing what we want, because computers take care of the stupid stuff, the stuff that
bugs us, the stuff that's in our way, the better for all of us. So why is this occurring
today? It's because of the prevalence of mobile networks. This is what this whole conference
is about. A music player that's not online is not particularly interesting. Take every
single device you have and imagine that it's connected to the cloud and could do something
more interesting, there are almost no exceptions. And in fact, physicists, technologists and
so forth, they're working very hard to make that possible. So what's interesting about
developers is today they think mobile first and they think mobile first because they know
that this is where the scale is. So if you're a young programmer, somebody coming right
out of college or somebody trying to start a new business, you're going to start mobile
first because that's where the growth is, that's where the action is, whether it's true
in our platforms, our competitors' platforms, or others. Now how did all of this happen?
Well, it's occurred because of three underlying technology trends that have been going on
for a long time. When I was at Sun in 1983, I was very excited about the 3M platform;
one megapixel, one megabit, one, essentially, one megahertz. Now today, these computers,
you know, my Nexus S, for example, has 160 gigabyte of flash memory, a gigahertz processor,
and a camera that takes five megapixel photos. Who would have thought that in that period
of time, all the things that I worked so hard to build, that took so many people, could
now be put literally in my hand. And this, of course, is just this month's flavor. Imagine
next month and the following month and then so forth and so on, you get the idea. And
in fact what's interesting is we've talked about this for a long time. It's not like
these ideas have been, the whole notion of cloud computing, is a new one. It's been present
in one form or another in computing and computer science for many, many decades. So smartphones
are clearly taking over, right? Last year I predicted, based on a whole bunch of analysis,
that within two years, smartphones would surpass PC sales. Well, as usual, I was wrong. Smartphones
surpassed PCs sales on a quarterly basis last week. And by the way, PCs are not catching
up at the rate they're going. So it's already over. We already know that the smartphone
is the destination for the next generation of games, apps, social connectivity, all the
things that we all care about. And it's interesting in a sort of reflecting on the history of
this, and I'm old enough to actually be able to think about these things, this device has
more than 20,000 times the computing capability of the sort of the lunar mission in 1969.
Again, you start thinking about what has occurred, what we could put in people's hands today
and it's just alarming at how powerful these things really are. And, of course, the same
thing has occurred on the networks, the average connection speed for smartphones increased
by over 60% versus 2009. Now many of you are on networks where you don't feel that's true
but the fact of the matter is it is. What's happened is that the connections have gone
up and your demands have gone up even higher. But the fact of the matter is that the operators,
many of whom in this room, are pouring billions and billions of dollars and Euros to make
it possible for us to offer wireless data at this scale. And it's interesting that we're
at the point now where roughly 98% or 99% of the world's mobile phone operators offer
megabit per second or higher speeds, EV-DO and up. Again, a great accomplishment, a lot
of hard work, a lot of frustration on their part, to serve their customers, our joint
customers. Now what's interesting now is with the roll out of LTE, right, and everybody
here knows what LTE is, a lot of the show is talking about it, it is reasonable to expect
that you can get a sustained 8 to 10 megabits, LTE, of course, is specked out well above
50 megabits, and what am I going to do with that 8 to 10 megabits? Well, I can think of
some things. But what's more importantly is that this LTE platform, whose roll out is
going to occur this year, will create the opportunity for another set of applications
which we can only imagine, which will be interactive, and gaming, and location-based, and so forth
for precisely that reason. So what happens is you have the phone, sort of the new PC
if you will, you have the network, with this phenomenal wireless data productivity, again,
think 10 megabits going from one megabit pretty much universally around the world which is,
you know, a gift from my perspective to mankind from all the people who built that, and then
you have cloud computing. And companies like Google are building very, very large data
stores, literally millions of computers that are linked together that provide these services,
so when you see a demo or you see somebody doing something, remember that they're showing
it to you on the phone but the key thing is that it's working with the service. You could
imagine that this has a lot of implications for things going on. What can my phone do?
It can take photographs. But why are these photographs not automatically uploaded when
I take them? It could take videos. Why are they not automatically uploaded? My phone
with a social component, with my permission, knows where my friends are so maybe it can
suggest my friends are nearby, there are many games that have come out that are very popular
startups that are doing precisely that. Again, another interesting thing. Wouldn't it be
interesting if you thought of the goal of your phone is first, as a communications device,
well, we've already taken that for granted, second as a data and browsing platform and
computation platform, which is what everybody's excited about now, and then the third, what
about a serendipity platform? What about your phone helping you learn new things and meet
new people you would not otherwise? That is the future of the platform that we are all
building together. So this idea is not a new idea. Bill Gates in 1990 said the following,
"Information at your fingertips." All the information that someone might be interested
in, including information they can't even get today. What happened over 20 years? We
had to build it out. The vision was correct but we had to build the operating systems,
the programming languages, the browser platforms, the underlying networking connectivity, or
all the various underlying wireless encryption protocols and distribution protocols, the
cellular network, the roaming charges, the roaming business structures and so forth and
so on. So all of a sudden now, with your phone, why can't--when my phone and I'm in traffic,
I'm trying to figure out where I'm trying to go and I have a choice of bridge or tunnel
or this path or that path, why is my phone not talking to my friend's phone and trying
to figure out what route they took and whether it was faster? I'll give you another example,
why is my phone not able to do something really important, which is telemetry of monitoring
people who are ill? Wouldn't it be better to have your phone be taking care of your
health? Think about it. It's there all the time, it's always on, and it might as well
monitor your blood pressure. And indeed, there are people operating on that to--sorry about
the pun--to make that sort of stuff happen. Even more importantly, because these things
are unified now, we can do something which is startling when you look at it. We can take
devices and in mid-use, because it's cloud-based, you could substitute another device. So for
example with our book product, this is true with others as well, you're busy reading a
page, somehow the phone breaks or what have you, switch to a different device, either
a PC or a phone, and there you are on the same page because it's all cloud resident.
So all of the sudden, you have this agility, you have this ability that nobody else could
do. So you really can do magic. Google Translate, the ability to talk to your phone and have
it come out on the other end in Spanish. And it's funny that you sit there and you think,
we've talked at length about universal translation and yet here it is, it's just arrived because
of the combination of the phone, the network, and all those computers. The phone just takes
your voice, the network just delivers the voice in encrypted or digitized forms and
the supercomputer that's in the cloud does the appropriate video and voice recognition,
the translation, the voice generation, and out it comes back the other way and that's
done in, you know, a twentieth of a second or what have you. So all of a sudden, you
can be anybody you want in terms of your ability to speak a language. You can, if you have
training in CPR, right, you can tell a location-based app to notify when your help is needed and
you can go off and help save a life. Start thinking about the implications of that level
of smartness, location dependency, and again, with your permission, sharing of information
with your friends. What I thought I would do is take a minute and have--and show a demo
of some of the things that you could do that might not be obvious. And I thought I'd ask
one of our Google executives, Gil, to come and join us. Gil, where are you? Can you join
us? There he is, Gil. And maybe you have actually developed an interesting application on--of
interesting new device. Maybe you want to show this device.
>> GEDANSKY: I would love to. Thank you, Eric. Good afternoon everyone. In the last couple
of days I've been taking a tour of historical landmarks of Barcelona. I used my Nexus S
to take a few photos, record a few video clips, which I then uploaded to my Picasa account.
Now, Nexus S is a great device for using it around town. It's light, fits in my pocket.
But when I get home or to my hotel room, I would love to use a different form factor.
For me, the new Motorola Xoom tablet is a great delivery device for media. Now, these
new devices are great not only for consuming media but also creating it. With the advent
of 4G networks, users will be enabled to use high quality video over wireless networks
like never before. Today, I'm going to demonstrate for you Movie Studio, a new Android application
which allow users to edit videos. It's an application built from the ground up for the
tablet form factor. So, let me show you what I mean. So, I'm going to open Movie Studio,
you're going to see that I have here a few projects that I've been working on and I've
prepared a project for the purpose of this demo. Now in this project, I already imported
three images and one video clip. As you can probably tell, on the first image, I already
added a title that says that I pretty much enjoyed my trip back in time in Barcelona.
What I would like to show you is some of the customizations you can bring to Movie Studio
to fit your artistic ability. So, one of the things we can do is we can reorder these media
items in the movie timeline. How about I grab this nice picture of the National Palace and
move it right after the first picture? I really like this one so let's take a quick look at
it and add a special effect to it. How about a pan and zoom effect? So I'll select pan
and zoom. Now I have the ability to change independently the start and the end rectangles.
So, let's leave the start where it is, and for end, maybe I'll just do a little bit of
zoom just for the effect. There we go. I could customize this project in many other ways.
I can change the duration of images in the timeline. I could trim the beginning or end
of video clips. I can add color effects to my photos and to my video clips. Now, let's
look towards the end of the movie, this is a video clip I took, I don't want my movie
to end this abruptly and therefore I was thinking a nice fade to black transition will look
good at the end so select that. And my movie is almost done but I think something is missing.
I know, I think a nice background audio track would make this movie interesting. So, I believe
that it would be appropriate to select some Spanish guitar tune so I'll import that into
my movie. And we are ready to preview this movie now. Okay, that will give you an idea
of how the movie will look like. How about let's watch that transition at the end? Good,
I'm happy with that. Now, once you have the movie set up the way you want it, how about
we export this movie, make it a real movie? And we'll select the movie size, so we'll
make it 720p, and the quality, let's say "high," and export it. Now, I'm not going to export
this now, it would take a little bit of time and we don't have that now, so I already did
that before this demo and I'm ready now to share this movie with my friends on YouTube.
I'm going to select that I want to share it on YouTube, let's just call it "Barcelona
2011," how appropriate, and there you go, the upload has started. Now, I hope I get
net happy here with my network connection in a second so what we're going to do is we're
going to switch to YouTube and we're going to look at my channel where I usually see
my downloads. Let's just wait a little bit. >> SCHMIDT: And we should mention by the way
that this is the new Honeycomb operating system. >> GEDANSKY: It sure is, and I hope everyone
will enjoy the new Honeycomb release on
the Xoom tablet. This is the part where you have to...
>> SCHMIDT: Yes. This is the problem of having a networking convention. Everyone is on the
network including the special networks. >> GEDANSKY: That's right. Any minute now.
I think we'll just--they will just have to trust me that the movie is there.
>> SCHMIDT: This is a Google engineer saying, "Trust me."
>> GEDANSKY: Either way, the movie is public so they can enjoy it on YouTube after the
show. >> SCHMIDT: They can. You can see it on, well,
you can see it on YouTube. >> GEDANSKY: That's right. I hope you enjoyed
this short run-through to the features of Movie Studio. Thank you.
>> SCHMIDT: Thank you very much. Gil Gedansky. Thank you very much, Gil.
>> GEDANSKY: Thank you, sir. >> SCHMIDT: So, I wanted to show you that
because I wanted to give you a sense of the power of the world that we're seeing, again,
all, in this particular case, on a new and upcoming tablet on top of the Android platform.
And when you play with Honeycomb, you'll see the sense of beauty and power that you get
with this new appropriate--this new user interface that we have invented, I think you're really
going to like it. I just absolutely love it. Google today can be understood in a different
form. Going back to what I was saying earlier, you can think of what we're trying to do at
Google is to get you do something very fast, that we ultimately believe that speed matters,
that your time matters, that we want you--we want to get to get you back to being human
and not a slave to the computer, network delays notwithstanding today. And so, you know, if
you think about it with our search properties, we've done a lot of things. People here have
played with Google Instant? All of a sudden, quick, you can sort of see previews of pages
along the side; you can see it over and over again. The investments that we've made in
underlying data center architecture and search architecture allows us to do this. And it's
interesting at the point now where we can answer the question as you're typing them
and this saves between two to five seconds per search according to our measurements.
Well, if you assume, you know, many, many hundreds of millions of users of Google everyday,
the savings in terms of hours and decades and so forth per day of human productivity
we're very proud of, plus it's a really neat feature and people really like it a lot. So
when you think of Google, that's just an example of many, think of speed. What happens next
with Search is it becomes even more personal; that, with your permission, give us more information
about yourself, if you logged in and what have you, we can give you even more personally
tailored answers. Next after that, let's call it autonomous search. Here I am, I'm in the
streets of Barcelona. I happen to like history. As I walk along, my phone tells me the history
of a beautiful architecture of Gaudi and so forth and so on as I walk or drive the streets.
I don't have to type the search in; the search is me and my interests with a GPS on a phone.
You sit there and you go, "Oh, that's kind of interesting." Well, that's just the beginning
of a large number of new apps that can be built that use that infrastructure to make
a big difference. And search is also fundamentally understanding about what you mean. When I
say, "What's the weather like?" it really means, "Should I wear a raincoat?" or does
it mean, "Do I want to water the plants?" So the more I know about you, the more Google
knows about you--again, you have to decide you want to do this. And I don't--and many
people would choose not to do this; those who do, all of a sudden, will be able to get
even more personal results. We have lots and lots of examples of this. And in fact, as
part of our investment in underlying search infrastructure, we're also working to provide
more structured data. We're literally working to sort of extract or to move from syntax
to semantics to understand that when you do a travel search, you're asking about pretty
structured data, whether it's hotels or airlines, and then we'll take you to the appropriate
sites that have all of the best information about that and then you can decide what you
want to do. We've already talked about mobile and the mobile platform which is a core part
of what we're doing, and mobile search is a core part of our business. In Chrome, another
important part of this, the Chrome browser has been growing very, very quickly. We have
more than 120 million active users, and it's up three times in the last year and it's six
times faster. So if you're using a traditional browser, I think you should use Chrome. More
importantly, because Chrome plus various library extensions and developer additions that we're
working on will provide a programming platform for this next generation of cloud-based applications
that I'm talking about, that we're demoing, and so forth and so on. We also--has a component--a
monetization component, because I learned a long time ago you can have really smart
engineers; no money, no money to pay them. Furthermore, the developers, as much as they
love a platform and the beauty of this, they'll go where the volume is and where they can
make some money. So not only do we have a strong monetization platform in out traditional
AdWords business, which everybody here knows about, but we also have it, for example, in
YouTube. Thirty-five hours of video uploaded every minute. Shocking. More than two billion
views per day, 160 million mobile views per day, more than double in the last year, and
accelerating, and the business is, of course, doing well. The revenue doubled in 2010. We're
finally now being able to monetize professional content at rates that are approaching what
we need to build significant businesses for those partners. We have a display business
which is also taking off, which shows these powerful display ads which show up both on
traditional desktops as well as mobile devices. And indeed, one of the key things about software
applications for mobile is they're going to want to have an advertising component, unless
they're selling the apps for a dollar or two dollars, and we want to make sure to do that.
So what does this mean architecturally? At some level, there's a disruption. Many of
you are part of that. You feel that disruption. And I want to be clear that we understand
that this is disruptive. We're not--we don't have our heads in the sand. We understand
that these are scale disruptions, they matter, they affect people's businesses and so forth.
In many ways, it's part of a pattern that has existed in humanity for a long time. There's
a quote from Joseph Schumpeter, "Capitalism inevitably leads to a perennial gale of creative
destruction," and I would argue that the Internet is fundamentally replacing the economics of
scarcity with the economics of ubiquity. And so in the situation where you have very low
cost to distribution and essentially infinite number of high quality copies, it affects
lots and lots of businesses. And I would argue that this is both terrifying and exciting.
It's exciting due to the scale, right? You could reach a billion worldwide, a billion
people worldwide in a month, or two months, or six months or what have you. You could
never do that before because of the power of the Internet, the pervasive nature of what
all of us have built together. But it's terrifying because it all has to do with information,
and information is what people care about more than anything else. And you'll see this
with repressive governments. You'll see this in all sorts of ways play out over the next
few years. And we'll be part of all these debates because privacy--we talk about privacy
and numerous other issues, and I think the debate is very healthy and I'm sure we'll
have it in the Q&A as well. But what I will tell you is that we're listening about all
of these issues because we're part of it as you are as well. So I want to finish my comments
and get to your questions or comments by talking about the next decade. I'm a computer scientist.
I believe very strongly in the optimism of what we can do with computers and science
to make the world a better place and I'm one of these people who believe that if you look
at problems we talk about all the time, global warming, terrorism, financial transparency,
these can all be aided very significantly by computer science and by the information
that we can make available, that fundamentally, transparency, right, the ability to sort of
analyze and see what governments are doing, for example, helps the body politic become
better. These are fundamentally information problems, and that's what computer science
is about. So let's think about this world over the next few years. And by the way, pretty
soon, in within a year or two, with these phones that I'm talking about which all of
you have, and the tablets that many of you have, and with many more coming this year,
well, let me give you a good example, you never forget anything, right? Computers are
interesting. Computers are very good at making lists, remembering things, and keeping memories
of what we do, which is precisely what we're not good at. So starting soon, again, if you
choose to, it'll be possible to remember the hotels that you stayed at, where you went,
the pictures that you took, the friends that you met with so that you can refer back to
that. Pretty powerful kinds of things. I just forget. Everybody forgets. Human memories
are not accurate, but computer memories live forever. Another example, you're never lost.
You know, when I was a boy growing up in Europe, I was always lost, right? I was lost as a
teenager, lost as a--lost in college, right? You have to go by the map. I couldn't afford
them and so forth and so on. Now, you're never lost. When was the last time you had a good
'being lost' experience, right? It just does not happen. Not only do you know now where
you are down to the meter, but soon we'll be able to do it down to the centimeter because
of the accuracy of the signals, right? I mean, you have to turn your computer off to get
lost and you would never turn off your computer, right, so you'll never get lost. It's this
bizarre property of all of this. And by the way, with your permission, all your friends
know where you are too so they can also find you. And what's interesting is that people
who love the Earth can love it more, right? I think all of us feel strongly about how
the planet, our only planet, is so important. You can learn using the tools and techniques,
things like Google Earth, and Maps, and all the other services. Not only can you see them
as static objects but you can build platforms on top of them, and navigate to them, and
understand how they're changing, and obsess about them in the way that you should, and
to understand what we're really doing to the planet and hopefully even fix it before it's
too late; pretty important. You could clearly have all the world's information at your fingertips
so we can translate everything to everything else. Now I don't know if that will prevent
war, but it will certainly increase the amount of talking before war, right? An awful lot
of conflict has been fundamentally due to misunderstanding of culture. Humans are generally
good and generally want the same things and yet we don't talk to each other enough. Now,
we can do it and we can understand the depth of the culture when we're sitting across the
other side of the table. You know what to pay attention right now. I don't know about
you all, but there's so much coming in, but the computer can help you sort out. We can
help figure out what you should be spending your time on. We can give you a priority list
that's tailored to you. All of a sudden, you're not lost, you could love the Earth, you could
talk to anybody you want to in the globe; pretty interesting. Even better, you're never
lonely, there's always people around you. And if they're not physically with you, they're
certainly online with you 24 hours a day. And when you're jetlagged, you can turn on
and you can talk to your friends in another set of time zones and they're there as if
you were there. And you're never bored because not only are there things to do, but we can
suggest even new things for you. So, a lifelong life of entertainment and knowledge is possible.
And you're never out of ideas, right, because we can always suggest new ideas, what you
can do, what you could do next and so forth. And imagine a calendar of all the world's
events, all the interesting things that are going on, all of a sudden, it's a potpourri
for all of us to choose from. All because of the ability to understand what you care
about, get that to you in real time on these new mobile devices, and use the supercomputers
that are in the cloud to properly sort them so you're not completely overwhelmed. And
of course, your car drives itself. It's obvious that cars should drive themselves. They'll
probably drive themselves home better than you will when you're drunk, you know, it seems
sort of obvious if you think about it. These have a kill switch in case there's a few bugs
but you get the idea. This is coming. It will be decades, I suspect, not a year, but it's
coming. But what's most important about this future, which I've not said, is it's a future
for the masses, not the elites. Historically, information was something that was held to
the elites, to the rich people, to the educated people. And the thing that I am proudest of,
and I share this I think with all of you, is it because of your work in spreading mobile
devices, two billion people will enter our conversation who we've never heard from in
the next three to four years. We don't know what they care about. Will they love Britney
Spears as much as we do or they care about other things, I have no idea. But the important
point is that they are coming. And they're coming with human values, human concerns,
human problems. And because of the architecture, because of the scale, because of the designs
that you all helped build at this conference over this many years, it's possible, and it
will change their lives so much more than it changed any of ours. And that's what I'm
proudest of. So this is a future that's very much committed to doing good. It's a future
where our technology, our approach, should give people something that matters to them
which is time. It should give them time back. It's as a quote--It's a quote from The New
York Times from William Gibson, "Google is made of us, a sort of coral reef of human
minds and their products." I hope we can all, working together, fulfill what I considered
to be an extraordinary vision of what technology can do to make mankind a better experience
and make the world a better place. Thank you so very much. I think we have--I think they're
bringing up the lights. I think we have time for questions or comments on anything I said.
I think we have mics. There's one there. There's one there. There's one over here. Could we
get some questions or comments on this or anything else? There's a question here. Question
there. Are there questions over there? We have a question here. Go ahead. Who has the
mic first? >> Thank you firstly on behalf of everyone
here. My name is Ben. I'm from Australia. And you mentioned about personalization. I'm
very excited about that myself. And talking about those sorts of things with a major talk
current in Australia at the moment, it's a forefront of mine and it's certainly spoken
about quite a bit. To expand a little bit further on that delivering more service and
being of more value that Google is really showing the advertising world very successfully,
when do you think that the advertising world will respond to that and pick it up? Because
really, you're still leading the way and there's a big gap between what you're doing and what,
I guess, the general market of advertisers are doing, pushing, rather than presenting
and serving the general population of the world?
>> SCHMIDT: Let me start by saying that Australia is leading the world in understanding the
importance of fiber. Your new prime minister, as part of her campaign and now in the prime
ministership, has announced that by, roughly, I think, 2015, 2016, 93% of Australians, which
I guess are all the folks in the cities, will have gigabit or equivalent service using fiber
and the other 7% will be handled through wireless services of the nature of LTE. This is leadership,
and again, from Australia which I think is wonderful. One way to think about ads in the
future is to think about the creativity of adverse--ads that you see on television which
are phenomenal--just, you know, we all know what I'm talking about--and then apply that
to a mobile device in a personal way. And to me, the tools and technologies that will
allow us to do targeted TV quality ads that are targeted to the unique nature of the individual,
again, with their permission and without violating their privacy which is the key thing, is the
next great frontier in advertising. The art of the, if you look at our display business
which is booming, the display business is fundamentally about telling stories. And as
we get better at targeting them, you'll get a better ad. And a better ad is more satisfying
to the viewer, right, because who wants to see an ad that's not relevant to them, and
it produces a better return on investment. And I would try to remember--remind people
that people advertise to get revenue. They don't advertise because it's fun to see the
ads that they paid for. They actually are trying to sell something. It's called commerce.
And the evidence that we have in the Internet is because the Internet is so--is so highly
measurable, these are wide-based ads, return investment ads, are the ones that customers
seek first. So, there are many, many companies involved in developing these new, more highly
targeted display--we'll call them display-based or narrative-based ads for this next generation
of phones likely, multi-billion dollar businesses right in front of us. So, more questions.
Over here. Yes, man. >> STRAND: My name is John Strand from Strand
Consult. >> SCHMIDT: Yes. Hi.
>> STRAND: Hi. I have a question regarding Androids. You said you will recommend young
students come out of universities to go mobile first and develop for these platforms. But
what we see right now is that Android is a very fragmentated platform that if you develop
an application for Android on one device, it actually don't run on other devices. And
I think there's a lot of frustration among phone manufactures and also particularly among
developers regarding these challenges. What would you do to avoid that the Android platform
is not so fragmentated in the future as it is today?
>> SCHMIDT: We hear some of this. I think you stated the problem more strongly than
I would, but I'll accept that as feedback. Under the terms of our licenses and the Open
Handset Agreement, we have an anti-fragmentation clause for all of the vendors who are precisely--who
precisely require to track a set of APIs. The real way in which this is kept together
is because of the importance of the App Store. No operator will want to be in the Android
ecosystem without getting the benefit of all those applications. And so, conformity to
those Apps, which is what you get with the basic Android releases, I think will serve
as the appropriate carrot and stick to get that rather than forcing everybody lock step
along the platform. In our case, we've released Gingerbread, which everyone is upgrading to.
That upgrade takes a month or two. And at that point, everyone would be on a common
platform which should address a lot of your concerns. Yes. Yes, sir.
>> CHRISTOPHERSEN: It's Thomas Christophersen from MoneyGram. Hi.
>> SCHMIDT: Hi. >> CHRISTOPHERSEN: I just wondered if you
could share your vision in terms of Google's role on the financial side of people's lives
in the future? >> SCHMIDT: By financial, you mean in terms
of financial--do you...? >> CHRISTOPHERSEN: Services. Their money,
managing their money? >> SCHMIDT: So--yeah. We're not into banking
as a bank... >> CHRISTOPHERSEN: Then payments, maybe then.
>> SCHMIDT: Oh okay, good. So--yes. So, Larry and Sergey have periodically suggested we
should offer something called Google Box. And I pointed out the regulation issues, et
cetera, so it's probably not going to happen. The serious answer is that there is--there's
another sort of mega scale opportunity right in front of us. This phone has this chip called
the NFC chip; Near Field--you guys know what these things do. It has basically an 80 character
secure element that's very difficult to break. It's encrypted. And it could be used as a
secure ID for electronic transactions. In Europe, which tends to lead many of the governments
and the credit card issues and so forth, are working over the next few months to standardize
on the use of NFC chips for payments and tap-and-pay systems. So it goes something like this: you're
walking down the street, you're confused, you know, which I am, typically. What am I
do--what I--and it's--your phone remembers that I need new pants, right? Or in some way
or need some new product. And it knows where I am and it knows ahead of me is a store on
the left and a store on the right. And one is going to offer me a 20% discount and the
other one's going to offer me a 30% discount. It shows me those two offers. It programmed
that I'm a cheap skate, and so I would take the biggest discount on a net revenue, you
know, basis, and tells me, "Turn right." I walk into the store. The store knows I'm coming.
The pants are ready. I sit there and go "boom", and out I go. You don't think this is going
to work, guys? Trust me. Think about consumerism. So that model or some variant of it, in terms
of the speed with which electronic transactions can do should revolutionize both electronic
commerce, as well as payments. And I think in that are very large businesses because
you know where the person is--again, this is all opt in, so they have to want it and
so forth and so on. You can see if you look at the success of Groupon in the United States
and here in Germany and a couple of other countries, you could see that these models
around consumerism really are working when they're tied to advertising and location,
so. Let's see in the back. Yes, ma'am. >> Sarah Monivac [INDISTINCT] Italia. Mobile
operator in this morning asked more cooperation in the TLH ecosystem, maybe sharing the cost
of investment in the network. And Mrs. Gruet, I met her at in the morning says that she's
also very interesting in cooperation in your business contest. What do you think about
it? And another question, are you interesting in Twitter and do you have contact?
>> SCHMIDT: Well, first place--first place, we love Twitter and I like to tweet. With
respect--with respect to this question of cooperation, one of the most important things
for us to do is to recognize that the investment--the investment cost of the operators is very,
very high and in particular in the wireless phase, there's a real issue around the wireless
capacity. And you see this in many of the countries where there's explosion because
the demands are going faster than the wireless capacity. So a couple of things have to happen.
First, governments have to make more bandwidth available. They need to reuse bandwidth that's
inefficiently used to serve their citizens better; it's part of it. And that's occurring
but it's occurring in my view too slowly. The second thing is that we and others are
sharing, for example; search revenue when you search. If you do a partnership with Google,
we'll share in the search revenue on mobile devices and that seems to help. A third thing
that we need to do is to recognize that most people will operate in a world where there's
a--there's a 3G, 4G LTE frequency band and also they'll have a Wi-Fi connection. So think
of it as having phones that have an automatic ability to understand that if it's something
that could be done in batch, it's done at night, or it's done in slow networks to respect
the cost and infrastructure and don't overload the big public networks. And all of that can
be done relatively-easily by technology. So, I think that's a pretty good summary where
we are. Let's see, we had this question down here. Yes? Yes, sir.
>> [SPEAKING IN FOREIGN LANGUAGE] Computer Sweden.
>> SCHMIDT: [SPEAKING IN FOREIGN LANGUAGE]. >> I think people are a bit confused about
the difference versions of your operating systems. Android 2.3 for phones, 3.0 for tablets,
and also the Chrome OS. >> SCHMIDT: Okay.
>> When will we see devices with Chrome OS? >> SCHMIDT: Okay. So, I understand the confusion
and I do apologize for it. Sometimes these things occur because the teams are running
so quickly. Today we all use the commonly used names. We have an operating system called
"Gingerbread" which is the one for mobile phones. We have an operating system that's
being previewed now which you saw on the demo for Tablets called "Honeycomb." The two of
the--you notice that starts with the "G" and then the next starts with an "H." You can
imagine that the follow-on will start with an "I" will be named after a dessert and it
will then combine the capabilities of both the G and the H releases. Okay, so hopefully
that answers that question. These releases occur on a roughly six-month cycle. So on
the order of six months later, and you can find the technical details on our websites
and you'll see all the capability there. There's an--a separate effort called "Chrome OS" which
is unrelated in the following sense. Chrome OS is, take Chrome and build a completely
new operating system largely targeted at Netbooks and PCs. So one way to understand the division
right now, is that if you are an Android user, you're going to be on a touch device and if
you're a Chrome OS user, you're likely to be on a keyboard device. We're working overtime
to get those technologies merged in the right way. I learned a long time ago; don't force
technology to merge when it's not ready. Wait for the technology to mature to the point
where it can be merged. I see over--yes, sir? >> NICK: Hi, Eric. This is Shawn Nick again.
I'd asked you a couple of questions last year. >> SCHMIDT: Okay, good.
>> NICK: A couple of serious ones this time. The first one, what do you think of the WAC
and the HTML 5 standard with regards to mobile lapse of course. And the second one is on
the more lighter node; do you think Larry should have been here instead of you? And
another lighter one... >> SCHMIDT: Can we do it in any order?
>> NICK: Sure. >> Let's start--let's start with Larry. Part
of the--part of the deal is when Larry. Sergey and I talked about making things more efficient.
Larry said, "Eric you get to fly around more." So, the answer is, he is extremely happy that
I'm here. >> NICK: Okay.
>> And Larry is probably asleep at the moment but if he's waking up, he's busy working at
his desk, working on products. So the division that we've all--you know, we work as a triumvirate.
And Sergey, of course, is working on a whole bunch of new issues with new opportunities
which we'll see. But the partitioning of external-internal is particularly comfortable for both Larry
and me. So, your first question had to do with HTML 5. The HTML5 standard is evolving
and it looks to me like HTML5 will eventually become the way in which almost all applications
will be built, including those for phones. There are some features missing but it's getting
there. And remember I said that it took--it's taken 20 years to get to this point. It's
because the underlying applications standard had to aggregate, if you will, the capabilities
that had evolved onto the proprietary Mac and Windows API frameworks. And what's interesting
is that all of the vendors including those with proprietary operating systems have adopted
HTML5 as their future direction. So there's every--and of course, Google has already,
so it's every reason to believe that eventually--eventually means some number of years from now--a lot
of the applications you use will be running on HTML5 in a mobile and non-mobile form and
that's another great simplification for developers and a good one. You had a third question?
>> Yes. The third one was what are the--in terms of financial trends, what are you seeing
with regards to your mobile advertising business? >> SCHMIDT: Well, the thing that has always
been most surprising to me is the monetization of the apps. I've been very impressed with
the monetization of apps on the--in the Apple ecosystem, and we've seen a similar trend
in the Android ecosystem. And that's very well--you always worry that's not going to
happen. You always worry you're going to have really cute apps but nobody will sell them.
People are willing to pay for these applications. We purchased a company that was heavily involved
in both Android and the--and essentially the IOS system and it's performed flawlessly for
us. Let's see, more questions over here. Yes, sir?
>> Google has been very successful bringing intelligence to their norm--to our consumer
and it has been very interesting. And also, we see Facebook has been very successful bringing
emotional value to the marketplace so we are spending a lot of time in the social life.
So what is your vision how Google is going to bring intelligence or--in the social life?
>> SCHMIDT: Well, in Google's case, we see ourselves as a platform. And with respect
to social information, we would argue that if you're willing to give us this information
which, again, you have to choose to, we can make your search better. A typical example
would be YouTube. We have a Leanback version of Youtube and so, if you're in Leanback mode
you--and you tell people--you tell YouTube who you're friends are; it can anonymously
use that as a signal to suggest even more relevant videos for you, same thing for maps
and so forth and so on. So our core strategy with the social activity is we try to make
our core properties, the ones that I've talked about, more essentially better because of
social information. Technically, it's another signal that we add to the matrix and that's
what our approach is. Yes, sir? >> Hi.
>> SCHMIDT: Go ahead. >> Good evening, Eric. I'm currently working
for the government in Belgium. >> SCHMIDT: Okay.
>> So I want to raise one point related to one important topic for the grow of the Internet.
So a couple of us over here knows of the importance of the IPv6 technology within the grow of
the Internet and the freedom and the part of the application. Not anybody--not a lot
of people over here knows this is important on the mobile world. What's your opinion?
We know that Google for--the v6 day is ready... >> SCHMIDT: Yes.
>> ...is pushing forward on the cable. What about the mobile?
>> SCHMIDT: So everybody here understands that IPv4 is the current standard of addresses
and the last block of IPv4 addresses is going to be allocated within the next six months.
So we really have a problem in terms of addressability and with the explosion of devices, you have
this issue. Google is one of the companies that, as you pointed out, is participating
in a day where we're going to test full IPv6 connectivity. And the technical problem is
that if you accept an IPv6 address as a router, you have to make sure that you can route it
all the way to the other end or you will fail to make the connection which is not okay if
you're a router. So we're trying to prove that. The general consensus is that the devices
that are modern, certainly the Google devices, all the other major vendors have IPv6 capabilities
and most of the route--most of the modern routers fully route IPv6. There is concern
about a lot of the intermediate things; the network addresses translation boxes, all of
the other things that sit in between things that you forgot about. You plugged it into
the wall and, you know, you haven't upgraded and so forth, so we're likely to find some
problems there. I believe that this is one of the great sort of urgent problems for this
vision and I thank you for asking about it. The good news is the technology is there.
The technology works very well and it's just a matter of making sure that we do a number
of these tests to make sure we get full IPv6 routing. We were concerned a long time ago
that with the explosion of, for example, IP addresses in India or China, we'd have to
have a whole country or continent be IPv6, but through modern address translation, they
were able to avoid that. But the time is now, we have to deal with it. In 1994, we did the
math and we said that we would run out of IPv's, IPv4 addresses, in 2008, plus or minus
three. And it's 2011 so we're roughly right on schedule. Yes, sir?
>> LOPEZ: Hi, Eric. Miguel Lopez for [INDISTINCT], Spain. You talked about the big possibilities
we will have in the future. We talked of those mobile devices and the tablets. But how do
you particularly see Google in 10 years, like in the Mobile World Congress in 2021?
>> SCHMIDT: Well, I'm sure the Mobile World Congress will be a lot bigger and Google will
certainly be a lot bigger. That's sort of the first thing I would say. Because this,
the description that I made is, it's not a one product cycle. In your lifetimes, there
are one or two technological transitions. There was the mainframe transitions and the
PC transition. We're now going into the mobile transition. So it's reasonable to expect that
10 years from now, the world will be even more mobile and we won't have to swap to something
else. The most interesting thing that's occurring is the development of artificial intelligence
on top of all the platforms that I'm describing that can help you make judgments, learn things,
needle-in-a-haystack problems. And the things that we'll go, "Wow," 10 years from now, will
probably be [INDISTINCT] in that area. I'm quite certain that the infrastructure will
be built out, that the devices will work, that everyone will be all connected. What
we cannot predict are the new killer apps, the things that are--the companies getting
founded today that 10 years from now we're going to go, "Oh, my god. I have no idea how
I lived without it," which is why this is so exciting. Yes, sir? Go ahead.
>> Yes. [INDISTINCT] Netherlands. A question about personal healthcare, as the cost of
healthcare rising, how sure you do--how do you see the mobile devices play out in, let's
say, the 10-year cycle you mentioned and how can it benefit people? How [INDISTINCT] efficient
from Google with this? >> SCHMIDT: It just seems obvious to me that
your mobile device should provide real time telemetry of your health. There are projects
now to try to have the mobile devices have sensors that can do this that are non-invasive
but at a minimum you can have the standard hospital or medical diagnosis clipped to you
and have your phone be providing that. So as you age or if you have some medical problem,
that's a starting point. There are estimates that between three and four of the percent
of the queries of Google are medical related and so we have worked very hard to make sure
that our medical answers are sufficiently accurate, that they say, "You are having a
heart attack. Please go to the hospital right now," right? And we want to make that more
automated and have the phone be able to assist you to do that. There's a question over here.
>> Hi. This is Demetrius from Greece. I have a question for you. Facebook collects data
about users and what they like through the Like button. As a result, sooner or later,
they will offer even more personalized advertisement. Do you believe that Facebook is your main
competitor in business ads? >> SCHMIDT: Well, today, our main competitor
is Microsoft. Microsoft has a very good product called Bing. There's a couple of cases where
it might be a little too good, we discussed that in a blog post a few weeks ago, but there's
no question that our primary competitor today is Microsoft. And I think that will be true.
Microsoft has a strong advertising model, very similar to the kinds of things--and they
have, as you know, they have the cash, the scale, the brand, and the reach to do good
and amazing things. Facebook today appears to be additive in the sense that Facebook
users use Google more and there's no evidence that the Facebook advertising is hurting our
advertising business in any way. For the moment, we would say Facebook is probably net--near
zero to net positive and it's clear to us that Microsoft is a core competitor and likely
to remain so for a long time. Over here, yes? >> MORIN: Tom Morin from winrims.com. What
are your thoughts on the Nokia-Windows phone partnership? And was this a missed opportunity
for Android? >> SCHMIDT: We would have loved that they
had chosen Android. They chose the other guys, that other competitor, the Microsoft. And
I think we're pretty straightforward. We would like them to adopt Android at some point in
the future, that offer remains open. We think Android is--was a good choice for Nokia and
we're sorry that they made a different choice. And I, certainly--we certainly tried.
>> Just to--Eric, a real quick question. I'm in the dark so I will smile then.
>> SCHMIDT: Yes, thank you. >> In terms of the--you mentioned that the
current approach has been to reach the elite and the middle class, however, in the future
it's about reaching the masses. >> SCHMIDT: Yes.
>> Do you have any specific applications outside of mobile video that is more for the masses
that you would be planning for the emerging market or the developing market? That's question
number one. And on the lighter side, I know the gentleman talked about Facebook. You know
the Google executive had to use Facebook to create revolution in Egypt, do you have any
other applications that you're trying to create within Google that would be any [INDISTINCT]...
>> SCHMIDT: Google Revolutions, [INDISTINCT] Inc., yes.
>> Thank you, those are my two questions, please.
>> SCHMIDT: Well what... >> In terms of the applications for the masses
that you--whether it's another [INDISTINCT], it doesn't matter.
>> SCHMIDT: So--okay, so let's talk about that in a sec. We are very, very proud of
what Wael and that group was able to do in Egypt. They were able to use a set of technology,
which included Facebook and Twitter and a couple of others, to really express the voice
of the people. And that's a good example of transparency and we wish them very much the
best. I've talked to him. You know, we're very, very proud of what he's done. That it
is the nature of collaboration technology that this sort of thing, and it's not one
company and certainly not only Google or anybody else, but it does change the power dynamic
between governments and citizens in some very interesting, and in a lot of ways, very unpredictable
ways. So, with respect to the emerging world, if you look at mobile penetrations and growth
rates one of the most stable businesses in the mobile--in third world countries is the
telecom company and virtually all of the deployment is mobile telephony using 3G standards and
typically EDGE kind of devices. The problem with the networks is that they're already
overloaded because they don't have enough capital and so forth, so that if you sort
of summarize the problems in those parts of the world, they have very high connectivity
costs, they have overloaded networks, and they have devices that are too expensive.
So one way to think about it, and we have a joke, that sort of yesterday--today's smartphone
is tomorrows' feature phone, and so it may very well be that with declining cost curve
the expensive phones that we have today could be made available almost free or near free
to people who don't have a lot of money anyway and can give them the power of the world that
we've taken for granted. The networks and so forth will require--it's a harder problem,
you have to do the capital build up, but there are many ways of solving that problem so I'm
very optimistic about it. Over here, yes? >> RICKNAS: Hi, Mikael Ricknas with IDG News
Service. At the show, we've seen a fairly large variety of Android phones, if you look
at the hardware, from Jewel core processors and lot of memory to I think what is the first--one
of the first 2G Android phones from Alcatel. So, when you go forward and develop both the
SDKs and the platform itself, how do you approach that fact?
>> SCHMIDT: We try to establish a basic set of functionality which is in the Open Handset
Alliance spec and we tried to bring out one phone, in our case it's the Nexus S, which
is I think been fairly heavily popularized, it's a 3G phone basically, which shows the
best that can be done. So the minimum requirements are in the spec but they include, for example,
some form of a modest touchscreen and a modest processor and a modest amount of memory. It's
important to establish a minimum so that you have common applications, so you're exactly
right there. Yes, sir? >> SMITH: Brian Oliver Smith, Urban Planet
Mobile. And you've built a couple of amazing platforms and what my question is, my children
use your platforms in so many ways to do their homework and such and yet, for whatever strange
reasons, it's often not embraced within the educational institutions. Can you speak a
little bit about what Google can do or how they can proceed to open up education to utilize
these platforms a bit more? >> SCHMIDT: We've talked a lot about the education
opportunity and what we could do there. I think our current view is that just the dispersion
of information is itself an educational opportunity and that's our highest priority. We have funded
a number of, for example, YouTube professors who have helped standardized information.
You get these gifted people, you give them a little bit of money and they can get all
of the worlds' knowledge, and they're fun to listen, and so forth and so on. We've not
yet come up with sort of the killer ed app and my observation that education, having
worked in it for a long time, is, there are many, many incumbencies in education which
resist change or are afraid of change and so forth. So the sooner we can get all of
them on these mobile platforms the quicker that change can occur. We have--let's see,
some more over there, and standing over here. Yes, go ahead.
>> LUCIDO: Hello, Eric. Raul Lucido of TechBA. Your mobile software for Android has been
a success. Are you planning to move to the PC world?
>> SCHMIDT: Move to the PC world? >> LUCIDO: Yes.
>> SCHMIDT: Well... >> LUCIDO: With a new operating system like
Android? >> SCHMIDT: Yes. Yes, we have a simple answer,
yes. >> LUCIDO: Okay.
>> SCHMIDT: It's called Chrome OS and it does not run any of your current PC applications
so you might think about it. The serious answer is that we are--we believe that cloud computing
applies to the desktop. We believe that you can build a desktop that's virus-free, incredibly
fast, very easy to use, very easy to share, and we've built that, called Chrome OS. It
can't get a virus, completely managed remotely, all the things that IT managers complain about
in the personal computer. Those products are available today in beta form and basically,
some time in the spring, you'll see a series of hardware manufacturers who will be delivering
them. They will not, as best I can tell, run some of the core, for example, Microsoft apps,
because Microsoft's not interested in supporting such a platform, but there are substitutes
which are almost as good or better in some different ways that you might consider. Let's
see, I'm being told by our host we have one more question so in the back, go ahead.
>> GOLDMAN: Hi, Eric. David Goldman with CNNMoney. I was just wondering if you--well, you mentioned
a lot of times that these personal features would be available, "With your permission."
>> SCHMIDT: Yes. >> GOLDMAN: I was wondering if you could talk
a little bit about the privacy dilemma and how you can get people on board with these
features when they may not necessarily want those things right now.
>> SCHMIDT: Most people trust brands that are trust--you know, they are sort of trustworthy
and so it's usually the case that if you offer something of value and people think that you're
So I say, "With your permission," to emphasize that we're not trying to violate people's
privacy with this information, we're trying to give them choices and we have a very defined
way in which we handle that information. The issues of privacy are very, very complicated.
And I've learned that there is not a single answer because sometimes privacy is the most
important thing but there are also situations where national security is an issue or so
forth and everybody--and those are issues that are well beyond Google's decision-making,
they submit to national and local laws as well as local customs. So as long as we're
on the side of "With your permission," in other words, you choose, you opt in, I think
people will adopt it and it will be fine from a regulatory perspective. Thank you all. Thank
you again and enjoy the rest of the show. Thank you.